In a dramatic development, US industry groups recently claimed the Indian government offered them a “private” assurance that compulsory licences will not be issued, save in emergencies and for non-commercial purposes.

Needless to state, such an assurance flies in the face of the Patents Act and the public health safeguards enshrined in it. Illustratively, Section 84 mandates that a compulsory licence be granted in favour of third parties, if the patented invention (such as a drug) is excessively priced or not available sufficiently. Relying on this, Natco, an Indian generic manufacturer, applied for India’s first compulsory licence some years ago and convinced the patent office that Bayer’s patented drug for kidney cancer, Sorafenib Tosylate, was excessively priced and available to hardly 2 per cent of patients. In sharp contrast to Bayer’s Rs 2.8 lakh per month price tag, Natco offered to sell its version of the drug at Rs 8,800 per month.

The controller of patents granted a licence upon the payment of a 6 per cent royalty rate to Bayer, ensuring this was not a zero-sum game but one that could potentially benefit the patent owner as well, given Natco’s knack of selling in markets beyond the ordinary purview of the high-priced patented drug. Upon appeal by Bayer, the patent office decision was validated, with some minor modifications in royalty rates. Unfortunately, despite this excellent start to the invocation of an important public health safeguard, no other licence has been granted since.

World over, compulsory licensing is largely a matter of government discretion to be invoked at the government’s pleasure. However, in India, Section 84 makes clear it’s a legal entitlement that cannot be pimped away through private assurances to foreign friends. Rather, the government is obliged to adjudicate each application on merit, donning its robe as a quasi-judicial authority. The patent office must, therefore, be equipped with personnel vested with a fair degree of adjudicatory competence and independence. Unfortunately, the functioning of regulatory authorities, such as the Drug Controller General of India (DCGI), suggests our government’s record in ensuring its statutory agencies’ independence has been far from fair.

In view of the fact that our government is yet to issue a public clarification on this private assurance, one is not sure if it intended to cover compulsory licensing as a whole. Or meant to restrict it to Section 92, a provision enabling the government to notify compulsory licences (of its own accord) on grounds of national emergency, extreme urgency or public non-commercial use. As such, this licensing is distinct from Section 84, and vests the government with considerably more discretion. However, “discretion” doesn’t mean the government can choose to ignore circumstances that warrant the exercise of discretion.

Unfortunately, while the first kind of licence (Section 84) was granted at least once in the past, the government has yet to issue any notification under Section 92. Even as the health ministry appeared keen on triggering this safeguard for a range of cancer cures, the commerce ministry played spoilsport. It sent a long list of questions asking for “data” on various aspects of the cancers/ numbers of patients, etc.

This seemingly sound list belies a glaring gap in our public health machinery. A lot of health data is difficult to come by, given that they reside in the sole possession of private parties like hospitals, pharmacies and drug companies. Consider cancer, a near epidemic now. Till date, there’s no Central law mandating disclosure of data on patients, treatment methods, drug pricing, etc.

Interestingly, the same data deficit was used by the government to deny the most recent compulsory licensing application under Section 84 to Lee Pharma, which bid for a licence against AstraZeneca’s Saxagliptin, a patented anti-diabetic drug. One finds it paradoxical that the only authority with the legal legitimacy to collect and publish health data transfers this onus to private applicants.

If serious about its constitutional commitment to good health, the government must immediately formulate a legal framework to compel private parties to disclose drug and disease data. More importantly, it must ensure quasi-judicial authorities (the patent office) remain relatively independent and are infused with sufficient training to ensure a fair, impartial and competent dispensation of justice.

Unfortunately, this government appears more keen on the private than the public, preferring trade to health, nepotic control over regulatory independence, and American patents over Indian patients. It’s a trade-off likely to only create more misery in India.

The writer is a visiting professor of law at NLSIU, Bangalore, and founder of SpicyIP

Compulsory licensing has been invoked only once in the case of Natco Ltd.(Nexavar drug). Though it is meant to give an impression that the patients would be protected, CL is not used as frequently as the author is portraying it to. Also what about the meagre D spending on medicine development? The article clearly presents a one sided face of the issue.

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Raghvesh

Mar 14, 2016 at 7:20 am

The govt wants to ensure e available most innovative products are available here, which cannot be done by preaching to profit-seeking enies.
Drugs and Patent Office bearers, including quasi-judicial ones, should take a more holistic view and the govt on its part can involve them in conferences with business councils and make sure they are on board with govt's policies.

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rkannan

Mar 14, 2016 at 7:29 am

Very cogently argued piece. The US pharmaceutical industry is notorious for frivolous patents which are granted either without real novelty or granted by greening of existing patents. There is a dire need to protect consumer interests against this. In addition, the US FDA imposes irrelevant and stringent conditions targetting certain Indian pharmaceutical companies thereby preventing their exports to US. By buckling to this notorious lobby, the Indian government is attacking Indian interests, including the hollow "Make in India ' campaign.

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S.K. Express

Mar 14, 2016 at 3:48 am

Another anti-government liar lying by twisting facts.

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sneha basu

Mar 14, 2016 at 11:32 am

The above article is highly one sided .... a mere claim from remote source exaggerated for the purpose of government bashing

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Prateik

Mar 14, 2016 at 8:16 am

Basheer-'Right to good health' is not consutional right just yet. So hang on your horses.

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vijay

Mar 20, 2016 at 6:45 am

It is now well settled that the Patent holder shall have to produce the accounts to prove to the court the cost of Patent and justify price such that its recovery within the life of the Patent.. failure the compulsory license should be and shall be granted with say 10% royalty..... this Rule of Natural Law will prevail not in India but USA and any other patent friendly Nations...by sheer logic and compulsion....rest ured....Patent ultimately is bound to serve public interest in any democracy.... USA is also on learning curve of this concept....

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Yudhajeet Sinha

Aug 28, 2016 at 4:02 pm

'Right to life' doesnt have an exhaustive meaning. 'Right to life' is inclusive of the right to dignified existence. And, therefore, right to good health is included within the ambit of right to life. You should read the SC judgements in Maneka hi vs Union of India and Sunil Batra vs Delhi Administration before making a fool out of yourself in public.